BlackRock takes stake in German digital wealth manager

Asset management giant BlackRock has made another investment in the digital wealth management space by purchasing a minority stake in Scalable Capital.

Scalable Capital, based in Munich and London, has announced the signing of a €30m funding round, led by BlackRock alongside existing investors HV Holtzbrinck Ventures and Tengelmann Ventures.

This brings Scalable Capital’s total funding to €41m and sees BlackRock taking a significant minority equity stake in the digital investment firm to help it grow its business with financial institutions and corporates.

As part of the deal, BlackRock’s chief operating officer, EMEA Patrick Olson will join Scalable Capital’s supervisory board.

Since its launch 16 months ago, Scalable Capital has gathered over €250m of assets from over 6,000 retail clients, and encounters strong demand from financial institutions and corporates.

Scalable Capital will continue to act independently. Its product selection and asset allocation decisions will remain independent.

The transaction is subject to regulatory approval and expected to close in the third quarter of 2017.

BlackRock’s Olson commented on the rationale of the investment: “The retail distribution landscape is evolving at a rapid pace, as consumers increasingly engage with their financial investments through technology. This trend is prompting strong demand from European financial institutions – including banks, insurers, wealth managers and advisory firms – for high-quality technology-enabled investment solutions.

“Our investment in Scalable Capital allows us to meet these evolving needs of our clients and their customers and to help shape their business models for the future.”

BlackRock’s existing digital wealth management suite already includes Aladdin Risk for Wealth, iRetire, iCapital and FutureAdvisor in the US.

Adam French, co-founder and co-CEO at Scalable Capital said: “BlackRock shares our vision that technology is not just a competitive advantage but a requirement for wealth management businesses to be successful in the future.

“Its investment in our firm is a fantastic validation of our work so far, opens up new growth avenues for our business and firmly establishes us on the digital wealth management map in Europe. BlackRock’s backing provides a huge opportunity for us to partner with their clients to help accelerate our business with financial institutions and corporates.”

BlackRock’s AUM was $5.4trn (€4.8trn) as of 31 March 2017.

Adrien Paredes-Vanheule
Adrien Paredes-Vanheule is deputy editor and French-Speaking Europe Correspondent for InvestmentEurope, covering France, Belgium, Geneva and Monaco. Prior to joining InvestmentEurope, he spent almost five years writing for various publications in Monaco, primarily as a criminal and financial court reporter. Before that, he worked for newspapers and radio stations in France, in particular in Lyon.

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